EXTRACTS FROM OFFICIAL ORAL EVIDENCE.
189
MEMORANDUM BY Sir FREDERICK GAUNTLETT, K.B.E., .C.I.E., I.C.S. [Continued.
19. The form of the Finance and Revenue Accounts. If the compilation of the accounts is in future to be transferred to the executive authorities, it is necessary to consider whether section 26 of the Government of India Act should remain in its present form. That section contemplates a single set of Finance and Revenue Accounts, prepared on uniform lines for the whole of India ; and even so the accounts of the. financial year 1926-27 covered more than 600 foolscap pages of print.- When the maintenance of provincial accounts becomes a provincial responsibility, , there may be a tendency for individual provinces to vary account forms to suit their own tastes and requirements. It is for consideration whether 'such individual variations should be permitted to affect the final form of the Finance and Revenue Accounts, with the inevitable result that true consolidation will become impracticable and. that the -separate exhibition of the accounts of different provinces will enormously increase the bulk of the, documents «to be presented to Parliament. It is submitted that it is unnecessary to allow a full dis-•cretien of this kind. If executive authorities are permitted to vary the form of .their preliminary accounts, • the concession should be subject to two conditions, firstly, that the accounts must be presented for audit in such form as the Auditor General is prepared to accept as suitable, and secondly, that, "when the final compilation is delivered to the .authority which will consolidate the accounts for the "whole of India, it must be delivered in such shape as the Secretary of State in Council may prescribe. It may ultimately be found impossible, as provincial autonomy progresses to maintain a rigid rule of this kind; but it is not in itself unreasonable and would not be inconsistent with a complete federal constitution.
20. Classification 'of Expenditure within the,Accounts. An important provision regarding the classification of expenditure appears in rule 20 of the statutory rules under section 96D (1) of the Act, which pre-.scribes that, if a doubt or. a dispute arises as to the major head under which a particular minor head, •or as to the minor head under which a. particular detailed head, of account should be included, it shall be decided by the Auditor General. This is clearly a proper function of audit, which is required to certify to the accuracy of compiled accounts. The
assignment of expenditure to a particular head of account is not, however, the only point as to which a doubt may arise. Under the present constitution of India, expenditure must be divided into other and parallel classes. It must, in the first instance, be either central or provincial expenditure ; secondly, whether central or provincial, it ensures classification as voted or non-voted ; thirdly, provincial expenditure falls again into two classes, according as it is incurred upon reserved or upon transferred subjects. In the case of a doubt whether expenditure is central or provincial, the decision rests with the Governor General in Council under rule 4 of the Devolution Rules made under section 45A of the Government of India Act, Sections 67A (4) and 72o (3^ of the Act itself lay upon the Governor General and the Governor, respectively, the duty of deciding a dispute as to votability. Finally, Devolution Rule 7 makes the Governor the final authority in,the case-of doubt whether an object of expenditure appertains to a reserved or to a transferred subject.
21. The classification of expenditure as voted QI non-voted, reserved or transferred, is exhibited, in the Finance and Revenue Accounts, and, if such exhibition is to continue, it seems most desirable that the classification'should be uniformly regulated throughout India. At present, there is no such uniformity. In respect of votability, practice varies considerably in the provinces, largely as a result of certain ambiguities in the wording of the relevant section of the Act. In the matter of reserved and transferred subjects, discrepancies are less numerous ; but they do exist. A typical example is the different treatment accorded in different provinces to expenditure by the Public Works Department, a department administering a transferred subject, upon buildings intended for use in connection with a reserved subject. It is submitted that, if this classification of expenditure is to continue, it is most desirable that it should be regulated on uniform lines by a single authority. A possible arbiter would be the Courts of Law, but it is probably unnecessary. to subject decisions, of this kind to an elaborate judicial pro-1 cedure. It would meet all the requirements of the case if the Secretary of State in Council retained in his own hands the power which has hitherto been entrusted to the various Governments.
Section HI —Certain important questions ol geneial interest which, while not primarily the concern of the Auditor General, have eome prominently to notice in the^ourse of audit operattons.
---- - - •' Does the clause " relating to," etc. limit " appropria-
" tion " or " revenues or money " ? As the revenues received by Government ordinarily bear no relation to any specific head of expenditure, the latter interpretation seems impossible. On the other hand, if rt is intended to limit " appropriation," the word " relating " is redundant and misleading.
(6) In the same clause, what is the meaning of " expenditure " ? Does it include sums technically treated as " expenditure " under the so-called Debt and Remittance heads, which involve no real disbursement by Government at all ? It is suggested that it is wrong in principle to submit to the vote transactions which affect only the Debt and Remittance section of the accounts. .
Again, should the clause so operate as to render it necessary to submit to the vote the appropriation from revenue to a depredation or reserve fond as well as the subsequent allocation of moneys from such fund for actual oatlay,
(c) With reference to the same clauses, m what shape should a demand for a grant he presented when a part of the gross expenditure is to be recovered from another Government oar from another department of the same Government? ShonM it shew the gross
^?^Sfy?iS!:S^^ssi
OTA (SMaTasKl section ISo <3> (M) ? As atj*e»ent interpreted m India, tfeo-oah faM effect ha* not heen
22. Preliminary remarks. This section of the memorandum will contain comparatively -brief comments on certain important questions of general interest which have come prominently to notice in the course of audit. These questions are mainly concerned with the interpretation of the Government of India Act and the statutory rules made under it. It will be for the Home and Finance Departments of the Government of India, rather than the Auditor General, to bring these questions to the notice of the Statutory Commission; and for this reason it is proposed to do no more m this memorandum than intimate very briefly the nature of the problems involved. The reference is confined to questions of major importance. There are numerous minor points in which the statutory rules, in particular, could with advantage be amended ; hut it is considered unnecessary to bring them
ffdure. These qu--------
interpretation of sections ««- «*«* .— ~- — The Snowing are of considerable importance,, _, assuming that the existing structure of the Act is maintained generally intact, it seems eminently desirable that it should be so amended as to leave mo doubt of the intention in each case.
(a) That is the meaning of-the phrase appropna-« tion of revenues-or moneys luting to beads of " expenditure" in sections 67x (4) and 72r> \S) ?